Notwithstanding the great proliferation of definitions, theories and approaches that characterized the recent years, there is still a certain degree of uncertainty about the acceptance of the concepts of "sustainability" and "corporate social responsibility" (CSR) and how they may or may not be applied to small and medium-sized enterprises (SMEs) as a factor of competitiveness.
Although the European Commission and Italian legislator with Legislative Decree 254/2016 provided for certain companies and certain large groups the mandatory disclosure of non-financial information - with undisputed reputational benefits - , there is an increasing number of smaller companies that have turned towards the issues of social responsibility, without however being able to fully seize the real opportunities.
According to a Prometeia research on 2017 data, only in Italy we are talking about 5.3 million SMEs (active companies with a turnover ≤ 50 million euros) which employ over 15 million people (82% of workers in, well above the EU average) and generate a total turnover of 2,000 billion euros. SMEs, therefore, represent 92% of active companies and are undoubtedly the most peculiar aspect of the Italian economy, reflecting traditions and entrepreneurship spread across the country. Their activities are concentrated in the services, construction and agriculture sectors (72% of SMEs' employees in Italy). In addition, it is worth noting how SMEs play a fundamental role in the economy of some territories and specific social contexts: for the southern regions, for example, SMEs represent 83% of production, compared to an average national contribution of 57%. Even the weight in terms of employment largely exceeds the Italian average, reaching 95%.
Sustainability, therefore, is no longer a romantic green apostrophe. Moreover, the economic impact of SMEs cannot be assessed simply by considering their direct involvement, but should be read in terms of supply chain. Italian SMEs are often part of complex and global value chains and their customers require compliance with increasingly stringent social and environmental Key Performance Indicators (KPIs), KPIs without which they are replaced with other suppliers.
Many key characteristics distinguish CSR approach in SMEs: a lack of codification of CSR in SMEs; personal motivations prevail over other motivations such as marketing approach, strategic or public relations approach. Generally, when a SME engages in social responsibility activities the owner-manager is the primary person interested in developing and implementing CSR activities. The involvement of the firms in local communities affects the choice of the firm to focus on socially responsible behaviours; the importance of social capital and informal relationships for the success of the firms – which is closely linked to their reputation – represent an important input to act with honesty and integrity; the central role played by human resources in SMEs generates a high commitment of the corporations in employees and their employee's families' well being; the industry in which the firms operate directly affects their approach to CSR. The nature of CSR implemented in small and medium-sized firms is mostly tacit. So, small businesses are sometimes assumed to perform poorly in socially responsible activities.
Despite these characteristics which distinguish SMEs from big corporations, which adopt formalised and more structured CSR systems, CSR does represent a crucial element of the value proposition of a global company, even more important if we consider certain aspects of business resilience typical of the current pandemic context.
It is true that the structural and financial limitations of SMEs, their local involvement and the important role played by the human capital, directly affect the prioritisation process used by managers to develop specific socially responsible activities. SMEs too often place a negative value on the cost-benefit ratio of adopting structured CSR practices and this is due to a kind of strategic short-sightedness: only considering CSR in the right long-term perspective it can be perceived as a driving force towards improvement and not an additional constraint that stands between, SMEs and their growth.
Italian SMEs, therefore, cannot afford to neglect the competitive leverage represented by the implementation of an adequate CSR system, but how to address this issue without facing the economic and financial effort resulting from the need to equip themselves with a specific staff or to enhance the existing one with adequate resources and training?
The most appropriate answer for SMEs is to outsource the CSR through advisory services specialised in the implementation and ongoing management of CSR strategies consistent with their core business so that they can bridge the gap. This does not exclude that, once the endogenous conditions of the company allow it, the CSR function can at any time be internalised.
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